Company car BiK
BEV rate is confirmed at 10% for 2030-31.
For cars emitting 1-50g CO2/km, the rate rises from 19% to 20%; all other bands increase by one percentage point, capped at 40%.
Eagle-eyed members may have spotted a mention of ULEV and salary sacrifice in the Budget document – this was an administrative error and has been removed.
Capital allowances
The first-year allowance (FYA) increases from 40% to 50% for qualifying expenditure from 1 January 2027, helping bring forward tax relief for eligible leased assets such as vans. Disappointingly, this comes alongside a cut in the main writing-down allowance from 14% to 12%, from 1 April 2027 for corporation tax.
Cars remain excluded from the FYA, leaving car fleets facing slower relief without the offsetting benefit. Treasury is still assessing the relatively new FYA for leasing and we will keep pressing for electric cars to qualify in coming years.
eVED
- Automated refunds by 2030:
- eVED Connect: an opt-in system using vehicle telematics to reduce manual mileage reporting has been announced but won’t be ready at launch in April 2028. There is no implementation timetable yet; we will engage through 2027.
- Mileage estimation tool: a consumer-facing GOV.UK tool will be available to help individuals estimate mileage; it is not a fleet reporting system.
VED
There are no major structural changes,
- Cars: standard rate £210, up from £200; EV first-year rate unchanged at £10; other first-year rates rise with inflation.
- Expensive Car Supplement: unchanged at £440, with existing thresholds retained.
- Vans: £375 for most vans, up from £360; the qualifying £140 rate for early Euro 4/5 and pre-2011 electric vans is unchanged.
- HGV VED: the reduced £1 rate for most HGVs continues for licences taken out between 1 July 2026 and 30 June 2027.
Other announcements
- Fuel duty: the 5p cut and freeze are extended to 1 July 2027, when the cut is due to end and RPI uprating take effect.
- AMAPs: 55p for the first 10,000 business miles in an employee’s own car or van becomes permanent; the rate above that rises from 25p to 35p from 6 April 2027.
- Public charging: following the Cost of Public EV Charging Review, a taskforce will explore using domestic tariffs at local public chargers, with no rollout date confirmed. From 1 November 2026, there will be 20% VAT on public and workplace charging.
- Leasing anti-avoidance: from 28 October 2026, for capital allowances purposes, the (section 228G) finance lease definition expands to relevant right-of-use leases in lease and leaseback arrangements. Members’ tax teams should review affected structures.
- Car hire and travel: HMRC’s review of VAT on travel services, including TOMS, closes on 31 January 2027 and matters for car hire sold through intermediaries or packages.